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 |
 |
| |
UP TO DATE TAX DATA - FROM APRIL 2009'S BUDGET
|
Main Taxes
Vehicles
Savings
Other Taxes
Giving, Credits and Benefits
Key Dates and Deadlines
| Income Tax (including Class 4 National Insurance) |
| 31 July 2009 |
2008/09 second payment on account
Further automatic 5% surcharge on any 2007/08 tax outstanding |
| 31 October 2009 |
Last filing date for paper 2009 return |
| 31 January 2010 |
2008/09 balancing payment, and
2009/10 first payment on account
Last filing date for online 2009 return |
| 28 February 2010 |
Automatic 5% surcharge on any 2008/09 tax outstanding |
| 31 July 2010 |
2009/10 second payment on account
Further automatic 5% surcharge on any 2008/09 tax outstanding |
| 31 January 2011 |
2009/10 balancing payment, and
2010/11 first payment on account |
| 28 February 2011 |
Automatic 5% surcharge on any 2009/10 tax outstanding |
| 31 July 2011 |
Further automatic 5% surcharge on any 2009/10 tax outstanding |
| Capital Gains Tax |
| 31 January 2010 |
2008/09 Capital Gains Tax |
| 31 January 2011 |
2009/10 Capital Gains Tax |
| Inheritance Tax |
| 6 months after the end of the month of death or chargeable transfer. |
| For chargeable lifetime transfers between 6 April and 30 September, due date is 30 April in the following year. |
| Corporation Tax |
| Small companies |
9 months and one day after the end of the accounting period |
| Large companies |
Four quarterly instalments commencing six months
and 13 days from the start of the accounting period with the balance
nine months and one day after the end of the accounting period |
| Latest Filing/Issuing Deadlines - 2008/09 PAYE Returns |
| 19 May 2009 |
P14, P35, P38, and P38A |
| 31 May 2009 |
Issue P60s to employees |
| 6 July 2009 |
P9D, P11D and P11D(b) - also issue copies to employees |
| 2008/09 Class 1A National Insurance on relevant benefits |
| 19 July 2009 |
Payment due |
| 2009 Tax Return |
| 31 October 2009 |
Last paper filing date |
| 31 January 2010 |
Last online filing date |
|
|
Income
Tax Rates
| Tax rates |
Note |
2009/10 |
2008/09 |
| Savings starting rate band to |
£2,440 |
£2,320 |
| Savings starting tax band rate |
10% |
10% |
| Basic rate band to |
4 |
£37,400 |
£34,800 |
| Basic tax rate |
20% |
20% |
| Higher rate - taxable income over |
4 |
£37,400 |
£34,800 |
| Higher tax rate |
40% |
40% |
| UK dividend rate |
32.5% |
32.5% |
| Trusts |
|
|
| Trust rate |
40% |
40% |
| Schedule F trust rate |
32.5% |
32.5% |
| Allowances that reduce taxable income |
|
|
| Personal allowance (PA) |
under 65 |
1,4 |
£6,475 |
£6,035 |
| |
65 to 74 |
1,3 |
£9,490 |
£9,030 |
| |
75 and over |
1,3 |
£9,640 |
£9,180 |
| |
Blind person's allowance |
|
£1,890 |
£1,800 |
| Allowances that reduce tax |
|
|
| Married couple's allowance (MCA) |
|
|
|
| |
75 and over |
1,2,3 |
£696.50 |
£662.50 |
| The age-related allowances are progressively withdrawn if income exceeds |
£22,900 |
£21,800 |
| Minimum PA |
£6,475 |
£6,035 |
| Minimum MCA tax reduction |
£267 |
£254 |
Non domicile charge
Charge for adult non UK domiciliary - applies after UK residence in seven or
more of the previous tax years |
£30,000 |
£30,000 |
| Tax Shelters |
|
|
| Enterprise Investment Scheme (EIS) up to |
£500,000 |
£500,000 |
| Maximum amount for EIS carry back |
£50,000 |
£50,000 |
| Venture Capital Trust (VCT) up to |
£200,000 |
£200,000 |
| Golden handshake max. |
£30,000 |
£30,000 |
| Rent a room - exempt on gross annual rent up to |
£4,250 |
£4,250 |
| Construction Industry Scheme - deduction rate |
|
|
| Standard rate - registered |
20% |
20% |
| Higher rate - not registered |
30% |
30% |
2010/11
A new 50% rate of income tax is introduced that will apply to taxable non-savings and savings income above £150,000.
The basic personal allowance will gradually be reduced to nil for individuals with adjusted net income above £100,000.
There will be three rates of tax for dividends - 20%, 32% and 42.5%.
Notes
- Ages are as the end of the tax year. Ages for the MCA relate to the elder of spouse or civil partner.
- MCA is available only to those couples where at least one spouse or civil partner was born before 6 April 1935.
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £22,900 until the basic allowance is reached. Similar limits apply to the married couple's allowance: the loss of tax reduction is 10p for each £2 of excess income until the minimum of £267 is reached. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner's income is taken into account).
|
|
Corporate Tax
Financial Years to |
31 March 2009 and 31 March 2010 |
| Taxable profits |
|
| First £300,000 |
21% |
| Next £1,200,000 |
29.75% |
| On profits over £1,500,000 |
28% |
| Tax credit on dividends |
10% |
| Marginal relief fraction |
7/400 |
Corporation tax payable
For small and medium sized companies
- Nine months and one day after the end of the accounting period
For large companies
- Instalments
- The 14th day of the seventh, tenth, 13th and 16th months after the commencement of a 12 month accounting period
- Balance
- Nine months and one day after the end of the accounting period
|
|
Inheritance Tax
| Transfers on or Within Seven Years Before Death |
| |
2009/10 |
2008/09 |
| Nil rate band to |
£325,000 |
£312,000 |
| Rate of tax on balance |
40% |
40% |
| Chargeable lifetime transfers |
20% |
20% |
It is possible to transfer unused nil-rate band allowances between spouses or civil partners. For individuals where death has occurred after 9 October 2007 a claim may be made to utilise any unused nil rate band from their deceased spouse or civil partner's estate.
The amount of the nil rate-band potentially available for transfer will be based on the proportion of the nil-rate band unused when the first spouse or civil partner died. If on the first death the chargeable estate is £156,000 and the nil-rate band is £312,000, then 50% of the original nil-rate band is unused. If the nil rate band when the surviving spouse dies is £350,000, then that would be increased by 50% to £525,000.
All lifetime transfers not covered by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax payable. This may then be reduced by taper relief.
| Charge on Gifts Within 7 Years of Death |
| Years before death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
| Tax reduced by |
0% |
20% |
40% |
60% |
80% |
| Main Reliefs |
| Business property: |
| Business or interest therein |
100% |
| Qualifying shareholders in unquoted* companies |
100% |
Land, buildings, machinery, or plant used
by transferor's controlled company or partnership |
50% |
| Agricultural property |
50% or 100% |
| *Unquoted companies include those listed on AIM |
Inheritance nil rate band increasing to £350,000
The Government has announced the IHT nil rate band for 2010/11 at £350,000.
Main exemptions
- Most transfers between spouses and civil partners.
- The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
- Gifts of up to but not exceeding £250p.a. to any number of persons.
- Gifts in consideration of marriage or civil partnership: up to
£5,000 by a parent, up to £2,500 by a grandparent, or up to £1,000 by
any other person.
- Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
- Gifts to charities, whether made during lifetime or on death.
- Gifts to political parties
|
|
Capital Gains Tax
| Capital gains tax rates and bands are as follows: |
| |
2009/10 |
2008/09 |
| Standard rate |
18% |
18% |
| Entrepreneurs' relief - effective rate |
10% |
10% |
| Annual exemption |
|
|
| - individual |
£10,100 |
£9,600 |
| - settlement(s) (spread over total number) |
£5,050 |
£4,800 |
| Chattels exemption |
| (proceeds per item or set) |
£6,000 |
| Marginal relief |
5/3 excess over £6,000 |
| Entrepreneurs' relief 2 |
£1 million |
Notes
- Transfers between spouses and civil partners living together are exempt.
- Entrepreneurs' relief is available in respect of gains made on the
disposal of all or part of a business, or gains made on disposals of
assets following the cessation of a business or gains by certain
individuals who were involved in running the business. The first £1
million of gains that qualify will be charged to CGT at an effective rate of 10%. Gains in excess of £1 million will be
charged at the normal rate of 18%. An individual will be able to make
claims for relief on more than one occasion, up to a lifetime total of
£1 million of gains qualifying for relief.
|
|
Value Added Tax
| From |
1 December 2008 to 30 April 2009 |
1 May 2009 to 31 December 2009 |
From 1 January 2010 |
| Standard rate |
15% |
15% |
17.5% |
| Standard rate VAT fraction |
3/23 |
3/23 |
7/47 |
| Reduced rate |
5% |
5% |
5% |
| Reduced rate VAT fraction |
1/21 |
1/21 |
1/21 |
| Taxable Turnover Limits |
| Registration - last 12 months or next 30 days over |
£67,000 |
£68,000 |
£68,000 |
| Deregistration - next 12 months under |
£65,000 |
£66,000 |
£66,000 |
| Cash accounting scheme - up to |
£1,350,000 |
£1,350,000 |
£1,350,000 |
| Optional flat rate scheme - up to |
£150,000 |
£150,000 |
£150,000 |
| Annual accounting scheme - up to |
£1,350,000 |
£1,350,000 |
£1,350,000 |
Cars and your VAT return
VAT scale figures for private use are now based on carbon emissions. Please refer here for the scale figures for one month, three month, and annual VAT returns. |
|
National Insurance Contributions
| Class 1 (not contracted out) |
Employer |
Employee |
| Lower earnings limit |
|
£95 |
| Payable on weekly earnings |
|
|
| £110.01 - £844 |
12.8% |
11% |
| Over £844 |
12.8% |
1% |
| Payable on monthly earnings |
|
|
| £477 - £3,657 |
12.8% |
11% |
| Over £3,657 |
12.8% |
1% |
Men 65 and over and
women 60 and over |
12.8% |
Nil |
| Employees' contracted-out rebate |
1.6% |
| Married women's reduced rate between £110 and £844 |
4.85% |
| Employers' contracted-out rebate, salary-related schemes |
3.7% |
| Employers' contracted-out rebate, money purchase schemes |
1.4% |
| |
|
| Class 1A (on relevant benefits) |
12.8% |
Nil |
| |
|
| Class 1B (on PAYE settlement arrangement) |
12.8% |
|
| |
|
| Class 2 (self employed) |
£2.40 per week |
| Class 2 contributions - share fishermen |
£3.05 per week |
| Class 2 contributions - volunteer development workers |
£4.75 per week |
| Limit of net earnings for exception |
£5,075 per annum |
| Contributions cease at state retirement age |
|
| |
|
| Class 3 (voluntary) |
£12.05 per week |
| |
|
| Class 4 (* Self employed on profits) |
|
| £5,715 to £43,875 |
8% |
| Excess over £43,875 |
1% |
| *Exemption applies if state retirement age was reached by 6 April 2009. |
| |
|
| Maximum contributions |
|
| Class 1 or Class 1 & 2 |
£4,279.22 + 1% of earnings over £844 p.w. |
| Class 2 and Class 4 |
£3,052.80 + 1% of profits over £43,875 a year |
Notes
- For those earning between £95 per week and £844 per week, employers
receive a rebate of 1.4% on contracted out money purchase schemes or
3.7% on contracted out final salary schemes, and employees, a rebate of
1.6% for either scheme.
- For children under 16, men over 65 and women over 60 there are no
national insurance contributions payable, but employers' contributions
remain payable.
|
|
Residential Property Letting
| Tax on rental business profits: |
| Unincorporated |
income tax rates - 20/40% |
| Incorporated |
corporation tax rates - 21/29.75/28% |
| Tax on chargeable gain on disposal: |
| Unincorporated |
18% on excess over exempt amount |
| Incorporated |
corporation tax rates |
| Maximum letting exemption relief 1 |
£40,000 |
| Landlord's energy saving allowance: |
| Maximum claim for income tax payers |
£1,500 |
| Maximum claim for corporate landlords |
£1,500 |
| Basis claimable |
claim per property |
| The availability of this claim is to be extended to 2015 |
| EEA Furnished holiday lettings (FHL): |
| Must be available for commercial letting for at least |
140 days p.a. |
| Be let for at least |
70 days p.a. |
| Not be let continuously in a seven month period for more than |
31 days |
| Please contact us to discuss the advantages and disadvantages of FHL which will be repealed from 2010/11 |
| Rent a room scheme income exemption |
£4,250 |
Notes
- Letting relief is available on let property which has been occupied as your main home.
- Annual profits are not subject to national insurance.
|
|
Main Capital Allowances
For limited companies subject to corporation tax expenditure is on
or after 1 April 2009, for unincorporated businesses expenditure is on
or after 6 April 2009.
Assets will be dealt with either in a main rate pool, a special rate pool or a single asset pool.
| |
Allowance |
Note |
| Main rate pool (plant and machinery and cars emitting not more than 160g/km C02) |
|
|
| New expenditure up to £50,000 (not cars) |
100% |
2 |
| New expenditure over £50,000 incurred in 2009/10 (not cars) |
40% |
3 & 5 |
| Unrelieved expenditure brought forward - writing down allowance |
20% |
|
| Special rate pool (long life assets, integral features and cars emitting more than 160g/km C02) |
|
|
| New expenditure up to £50,000 (not cars) |
100% |
2 |
| New expenditure over £50,000 |
10% |
3 & 5 |
| Unrelieved expenditure brought forward - writing down allowance |
10% |
|
| Energy efficient and environmentally beneficial technologies (ECA) |
100% |
4 |
| Motor cars |
|
|
| New cars emitting not more than 110 g/km CO2 |
100% |
5 |
| Acquired before April 2009: On reducing balance (max £3,000 p.a. per car) |
20% |
5 |
| Research and development relief |
130% or 175% |
6 |
| Industrial buildings and qualifying hotels (IBA) |
2% of building cost p.a. |
7 |
| Agricultural buildings (ABA) |
2% of building cost p.a. |
7 |
| Commercial/industrial buildings in an enterprise zone (EZA) |
100% of building cost |
7 |
| Business premises renovation allowance |
100% |
|
| Flat conversions |
100% |
|
- Capital allowances allow the cost of capital assets to be written
off against taxable profits. They replace the charge for depreciation
in the business accounts, which is not allowable for tax relief.
- Where a business has a chargeable period of less than a year the maximum allowance is reduced or increased pro-rata.
- When the value of the main and special pools are less than £1,000 they may be fully written off.
- A loss attributable to the enhanced capital allowance on ECA's may
be surrendered for a cash payment of 19% of the loss surrendered, but
limited to the greater of the companies PAYE and NIC liabilities for the period or £250,000
- With effect from 1 April 2009 for corporation tax purposes and 6
April 2009 for income tax the capital allowance treatment of business
cars is: Expenditure on cars with CO2 emissions above 160
g/km will be included in the special rate pool and will attract a 10%
writing down allowance (wda) and expenditure on cars with CO2 emissions of 160 g/km or below will attract a 20% wda as part of the
main pool. Cars purchased before the date of change will remain within
the old rules attracting 20% wda up to a maximum of £3,000 per annum.
Cars with private use will remain in single asset pools subject to the
appropriate rate of wda according to their emissions.
- The rate of relief for large companies will increase to 130% of
qualifying R&D expenditure. In the case of SME R&D tax credit
scheme, the rate of relief will increase to 175% for companies claiming
enhanced deductions against profits.
- IBA and ABA are being phased out and will reduce by 1% p.a. until
2010/11 when they and EZA will cease. The tax written down value of the
building will however continue to reduce at 4% of cost until that time.
There have been many changes announced, please contact us for details that you consider apply in the future. |
|
Business Deductions
In order to attract a deduction in computing the profits of
a trade or business any expenses must be incurred wholly and
exclusively for the purpose of the trade. Capital expenditure is not an
allowable expense (capital allowances are claimed on these costs), and
certain other expenses are barred by statute. However, there are a
number of expenses which while deductible also have other favourable
tax treatment.
If you find any of these of interest, please do discuss with us the detail of the arrangements as some are quite restrictive.
| Annual party |
Note |
2009/10 |
2008/09 |
| Exempt amount per head |
1 |
£150 |
£150 |
| Long service awards |
| Minimum term of service |
|
20 years |
20 years |
| Value of gift |
2 |
£50 per year |
£50 per year |
| Suggestion schemes |
| Encouragement award |
|
£25 |
£25 |
| Payment in relation to first year benefit |
3 |
50% |
50% |
| Payment in relation to ongoing benefit |
3 |
10% |
10% |
| Maximum period for ongoing benefit |
|
5 years |
5 years |
| Overall maximum |
4 |
£5,000 |
£5,000 |
| Household expenses contribution |
| Per week amount |
5 |
£3 |
£3 |
| Relocation expenses paid to staff |
| Maximum amount |
6 |
£8,000 |
£8,000 |
| Works bus |
| Minimum number of seats |
|
9 |
9 |
| Customer gifts |
| Limit per gift |
7 |
£50 |
£50 |
| Sports facilities (Note 8) |
| Childcare provision |
| Weekly limit |
9 |
£55 |
£55 |
Notes
- An annual Christmas party or similar annual event for staff is an
allowable expense, and is not taxable on the staff attending provided
the cost per head does not exceed £150. The excess is taxable on the
staff attending as a benefit in kind.
- This exemption does not apply to gifts of money. Subsequent awards
must be more than 10 years after the last gift; the award is not
taxable on the recipient.
- Either a payment may relate to the first year net financial
benefit, or to ongoing net financial benefit, but not both. Various
terms and conditions apply for the recipient to receive the payment tax
free.
- The maximum amount is shared between the number of recipients for the same suggestion.
- Where employees work form home (including on an occasional basis)
payments of up to the exempt amount in respect of additional household
expenses are not taxable on them. If the employer chooses to make
higher payments, they will be tax free if they do no more than
reimburse reasonable additional costs incurred because the employee is working from home.
- Staff in receipt of tax free relocation packages must meet a number of stringent conditions.
- The gifts may not be food, drink or tobacco, and the limit applies
to all gifts to the same recipient in an accounting period. VAT is also
recoverable on gifts, subject to this financial limit, but the
restriction of food, tobacco and alcohol does not apply.
- Sports facilities made available to staff are not taxable on them
as a benefit in kind provided certain conditions are met. The main
condition is that the facilities are not also available to the public,
so this prevents payment of sports club membership for staff. The
exemption also cannot apply to the provision of cars, boats or aircraft
and similar, nor to facilities on domestic premises.
- The provision of full time care in a work place nursery is tax free
on staff provided it is offered to all. Otherwise a contribution to the
cost of care paid direct to the childcare provider under a contract
with the employer, or through the provision of childcare vouchers is
tax free up to the weekly limit. Again, detailed conditions apply to
this exemption.
|
|
Penalties for Late Returns
| |
Note |
2009/10 |
2008/09 |
| Income tax self assessment |
| Standard penalty - up to 6 months late |
1,4 |
£100 |
£100 |
| Standard penalty - up to 12 months late |
1 |
£200 |
£200 |
| Return over 12 months late |
|
100% of tax due |
100% of tax due |
| Daily penalty - confirmed by Commissioners |
|
£60 |
£60 |
Corporation tax self assessment |
| First and second late returns - up to 3 months late |
|
£100 |
£100 |
| Third consecutive late return - up to 3 months late |
|
£500 |
£500 |
| First and second late returns - 3 - 6 months late |
|
£200 |
£200 |
| Third consecutive late return - 3 - 6 months late |
|
£1,000 |
£1,000 |
| Returns more than 6 months late |
|
10% of tax outstanding |
10% of tax outstanding |
| Returns more than 12 months late |
|
20% of tax outstanding |
20% of tax outstanding |
| PAYE |
| Year end return (form P35) and related forms |
|
£100 per 50 employees per month (or part) |
£100 per 50 employees per month (or part) |
| Form P11D(b) where due |
|
£100 per 50 employees per month (or part) |
£100 per 50 employees per month (or part) |
| Forms P11D |
|
£300 per form |
£300 per form |
CIS |
| Monthly return - CIS 300 |
|
£100 per 50 subcontractors per month |
£100 per 50 subcontractors per month |
VAT : default surcharge periods |
| First return in surcharge period |
3 |
2% |
2% |
| Second return in surcharge period |
3 |
5% |
5% |
| Third return in surcharge period |
|
10% |
10% |
| Fourth and subsequent return in surcharge period |
|
15% |
15% |
Notes
- The fixed penalties for late self assessment returns cannot exceed
the tax outstanding on the due date for the return. If all of the tax
has been paid the fixed penalty is zero. This does not apply to
partnership and trust returns.
- VAT default surcharge also applies when the VAT return has been
submitted but the VAT remains unpaid. The penalty is calculated at the
rate shown applied to the VAT outstanding. Late repayment returns still
register as a default, but no penalty is due.
- Penalties at 2% and 5% are not levied if the amount of the penalty
does not exceed £400, but the default still registers and increases the
potential penalty for the next default.
- Taxpayers who file late paper return, but pay all of their tax
outstanding before 31 January 2010 will have their penalty "capped" at
zero.
So a late paper return will not, accrue a penalty provided that the tax
is paid by the due date. This does not apply to partnership returns.
Limited company accounts – late filing penalties
With effect from 1 February 2009 penalties for late filing of
accounts increased. These penalties represent an increase of 50 percent
and are intended to take account of inflation from 1992 to 2007.
From 1 February 2009 the penalties are:
| Length of delay, based on the filing date |
Private company |
Public company |
| Not more than one month |
£150 |
£750 |
| More than one month but not more than three months |
£375 |
£1,500 |
| More than three months but not more than six months |
£750 |
£3,000 |
| More than six months |
£1,500 |
£7,500 |
|
|
Trusts and Settlements
| |
Note |
2009/10 |
2008/09 |
| Income |
|
| Rate applicable to trusts |
1,3 |
40% |
40% |
| Dividend income tax rate |
1,3 |
32.5% |
32.5% |
| Standard rate band |
2 |
£1,000 |
£1,000 |
| Exempt amount - trust for infant children |
4 |
£100 |
£100 |
| Capital Gains |
|
| Trust capital gains tax exempt amount |
5 |
£5,050 |
£4,800 |
| Minimum amount |
5 |
£1,010 |
£960 |
| Rate of tax |
|
18% |
18% |
2011 and beyond
From 6 April 2011 the dividend trust rate will be 42.5% and the trust rate of tax will increase to 50%.
Notes
- Trust income within the standard rate band is not taxable at the
rate applicable to trusts, but bears the rate of tax appropriate to
that type of income - savings income at 20%, dividends at 10%.
- Trustees are liable at the rate applicable to trusts and the
related dividend rate if they have power to accumulate income or have
discretion over whether the income is made available to beneficiaries.
- Income taxed on the settlor of a trust, rather than the trustees is
taxed as the settlor's top slice of income. This normally arises when
the settlor has retained an interest in the trust, but also applies
where the trust is for the benefit of his infant children.
- Capital invested on behalf of an infant unmarried child is treated
as a settlement and the income is taxed on the settlor parent if it
exceeds the exempt amount.
- The annual exempt amount is divided by the number of settlements
created after 6 June 1978, subject to the minimum amount. There is no
annual exempt amount available when the gains are taxable on the
settlor under the settlor interested trust provisions.
- Where a trust has vulnerable beneficiaries, including a minor child
who has lost a parent, the trustees may claim to reduce their tax
liability (income and capital gains tax) to that which would be borne
by the beneficiary. This gives the trustees the benefit of the
beneficiary's personal allowances and basic rate band.
- Bare trusts established for the settlor's children benefit from CGT
annual exemption. Income is subject to the £100 limit then taxed on the
parent as their top slice of income.
|
|
Non Domiciled Individuals
| |
2009/10 |
2008/09 |
| Income limit - remittance basis automatic |
£2,000 |
£2,000 |
| Long term resident period |
7 years |
7 years |
| Long term resident payment - per annum |
£30,000 |
£30,000 |
Notes
- The remittance basis of taxation for non UK income and gains must
be claimed by most taxpayers who are UK resident but not domiciled
here, or not ordinarily resident. Before that the remittance basis was
automatic for non UK income and gains.
- Those with unremitted foreign income and gains below the limit of
£2,000 are automatically entitled to the remittance basis, with no loss
of allowances.
- Where the remittance basis is claimed the taxpayer loses his right
to UK income tax personal allowances and capital gains tax annual
exemption.
- For those who have been resident for the year of claim and at least
seven of the previous nine tax years the remittance basis is only
available on payment of the amount shown, as a tax charge on unremitted
income and gains. This payment is in addition to the tax on remitted
income and gains. No UK personal allowances or capital gains tax
exemption would be available. The charge does not apply to children
aged under 18. The change counts as UK tax paid for the purposes of Gift Aid.
- If funds are remitted to the UK to pay the £30,000 charge, tax will
be due on any remitted income in the normal way. However, it is
permitted to pay the charge direct from a foreign source and avoid
additional UK tax.
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Mileage allowances
Fuel-only mileage rates
HM Revenue & Customs advisory mileage rates for employee private mileage reimbursement or employer reimbursement of business mileage are:
From 1 January 2009
| Baseline fuel mileage rates |
| |
Rates per mile |
| Engine Capacity |
Petrol |
Diesel |
Gas |
| Up to 1400cc |
10p |
11p |
7p |
| 1401 - 2000cc |
12p |
11p |
9p |
| Over 2000cc |
17p |
14p |
12p |
From 1 June 2008 to 31 December 2008
| Baseline fuel mileage rates |
| |
Rates per mile |
| Engine Capacity |
Petrol |
Diesel |
Gas |
| Up to 1400cc |
12p |
13p |
7p |
| 1401 - 2000cc |
15p |
13p |
9p |
| Over 2000cc |
21p |
17p |
13p |
HM Revenue & Customs have announced that rates will now be reviewed biannually and generally any changes will take effect on 1 January and 1 July. This area of our site will be updated around the beginning of June and December about one month before any change takes effect.
For employees using their own transport
The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:
| Flat Rate |
First 10,000 Miles |
Miles over 10,000 |
| Car or van |
40p |
25p |
| Motorcycle |
24p |
24p |
| Bicycle |
20p |
20p |
Will these rates change?
We understand the HMRC have indicated in a response to a Parliamentary enquiry that it is not intended that these rates will change.
Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees in a car or van on the same business trip. |
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Vehicle Benefits
Chargeable on employees earning £8,500 or over (including benefits), and directors. The fuel benefit charge multiplier (FBC) for 2009/10 is £16,900.
Car benefit
The tax you pay on your company car is governed by five factors:
- The list price of the car, on the day before it was first registered, plus certain accessories,
- The rate at which the car emits carbon dioxide (CO2),
- The fuel type (for most types of car, this is all the information you need to work out the taxable benefit)
- Your highest rate of income tax
- Any capital contribution to the cost of the car up to a maximum of £5,000
You can find your taxable percentage for 2009/10 using the following table:
| CO2 in g/km* |
Taxable % |
CO2 in g/km* |
Taxable % |
| Petrol |
Diesel |
Petrol |
Diesel |
| Less than 121 |
10% |
13% |
185 to 189 |
25% |
28% |
| 121 to 139 |
15% |
18% |
190 to 194 |
26% |
29% |
| 140 to 144 |
16% |
19% |
195 to 199 |
27% |
30% |
| 145 to 149 |
17% |
20% |
200 to 204 |
28% |
31% |
| 150 to 154 |
18% |
21% |
205 to 209 |
29% |
32% |
| 155 to 159 |
19% |
22% |
210 to 214 |
30% |
33% |
| 160 to 164 |
20% |
23% |
215 to 219 |
31% |
34% |
| 165 to 169 |
21% |
24% |
220 to 224 |
32% |
35% |
| 170 to 174 |
22% |
25% |
225 to 229 |
33% |
35% |
| 175 to 179 |
23% |
26% |
230 to 234 |
34% |
35% |
| 180 to 184 |
24% |
27% |
235 and over |
35% |
35% |
| * The exact CO2 figure is rounded down to the nearest 5g/km |
How to find out how much CO2 your company car emits – see:
- The car’s V5 registration document
- Your dealer
- The data pages of car magazines (current models)
- The Vehicle Certification Agency – www.vca.gov.uk
- The website of the Society of Motor Manufacturers and Traders - www.smmt.co.uk/co2/co2search.cfm
Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:
| Engine capacity |
Taxable % |
| Up to 1400cc |
15% |
| 1401 - 2000cc |
22% |
| Over 2000cc |
32% |
Car fuel benefits
If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.
The taxable car fuel benefit, for 2009/10, is calculated by multiplying £16,900 by the same percentage as applies (or would apply) for the car benefit.
Example: A company car driver has a car which, on the day before it was first registered, had a list price of £18,000. It runs on petrol, and emits 172 g/km of CO2.
If we assume the driver pays tax at 40%, the annual tax bill on the car is: £18,000 x 23% x 40% = £1,656
If the employer provides any fuel used for private journeys and is not re-imbursed for the cost, the 2009/10 tax bill for the fuel is: £16,900 x 23% x 40% = £1,554.80.
Company vans
The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £500 of taxable benefit if fuel is provided by the employer for private travel.
The maximum tax payable on the use of a company van is £1,400 p.a., and the employer's Class1A NIC payable is £448 p.a. |
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Vehicle duties 2009 - 2012
| VED Band |
CO2 Emissions |
2009-10 |
2010-11 |
2010-11 |
2011-12 |
| |
|
Standard Rate |
First Year Rate |
Standard Rate |
Standard Rate |
| A |
Up to 100 g/km |
£0 |
£0 |
£0 |
£0 |
| B |
101-110 g/km |
£35 |
£0 |
£20 |
£20 |
| C |
111-120 g/km |
£35 |
£0 |
£30 |
£35 |
| D |
121-130 g/km |
£120 |
£0 |
£90 |
£90 |
| E |
131-140 g/km |
£120 |
£115 |
£110 |
£110 |
| F |
141-150 g/km |
£125 |
£125 |
£125 |
£125 |
| G |
151-165 g/km |
£150 |
£155 |
£155 |
£155 |
| H |
166-175 g/km |
£175 |
£250 |
£180 |
£180 |
| I |
176-185 g/km |
£175 |
£300 |
£200 |
£200 |
| J |
186-200 g/km |
£215 |
£425 |
£235 |
£235 |
| K |
201-225 g/km |
£215 |
£550 |
£245 |
£245 |
| L |
226-255 g/km |
£405 |
£750 |
£425 |
£425 |
| M |
Over 255 g/km |
£405 |
£950 |
£435 |
£435 |
The above is for cars registered since 1 March 2001 |
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Pension Premiums
There is no limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.
If total pension input exceeds the annual allowance of £245,000 there is a tax charge at 40% on the excess. This limit does not apply in the year that full pension benefits are taken.
| Maximum age for tax relief |
74 |
| Minimum age for taking benefits |
50 |
| Lifetime allowance charge |
- lump sum paid |
55% |
| |
- monies retained |
25% |
| on cumulative benefits exceeding |
£1,750,000* |
| Maximum tax-free lump sum |
25%* |
| *Subject to transitional protection for excess amount. |
2010 and beyond
The annual allowance and lifetime allowances already announced up to 5 April 2016.
| |
Annual allowance |
Lifetime allowance |
| 2010/11 to 2015/16 |
£255,000 |
£1,800,000 |
Budget 2009
Measures introduced in the budget will have an impact on the availability of tax relief for individuals with an income of £150,000 or more, change:
- The pattern of normal regular pension contributions; or
- The normal way in which pension contributions are accrued; and
- Total pension contributions / benefits accrued (pension savings) exceed £20,000 a year
In these circumstances please contact us for advice.
Notes
- Transitional reliefs are available to protect pension rights built up before 6 April 2006 by registering and protecting those rights, including lump sum rights in excess of £375,000. A claim for this transitional relief must have been made by 5 April 2009. Certain pre-existing lump sum rights of more than 25% are automatically protected.
- The annual allowance and lifetime allowance are to be frozen for a five year period from 6 April 2010.
|
|
ISAs
Investment maximums for ISAs are as follows:
Individual Savings Accounts (ISAs) |
Up to 50 |
50 and over
(note 1) |
| Overall investment limit |
£7,200 |
£10,200 |
| Including cash maximum of |
£3,600 |
£5,100 |
Notes
- This enhanced limit for those 50 and over applies for 2008/09 and from 6 October 2009.
- Stakeholder cash and medium term products can be held in your ISA.
- Investments in ISAs are free of income tax and capital gains.
- Those aged 16-17 can invest up to £3,600 only.
- ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.
- The income tax credit is restricted to 20%. Capital gains tax deferral relief is also available.
- From 16 December 2008, ISA investments may now include bonds which are issued by Multilateral Institutions.
Did you know?
From 6 April 2010, the ISA limit will increase to £10,200, up to £5,100 can be saved in cash for all ISA investors.
An HMRC survey* of 1250 individuals concluded that:
- One third of ISA holders had been encouraged to save by the existence of tax-free ISAs and approximately one quarter cited tax incentives as the principle reason for saving.
- 40% of ISA holders have saved £8,000 or more in their ISA account.
- Mini cash ISAs were the most popular form of ISA
- 53% of ISA holders fund their ISAs from their income, while 28% fund their ISA by a transfer from taxable savings and 16% transferred funds from non-taxable savings.
- 14% reported that inheritances and gifts were the primary source of their ISA investments.
- 60% have never made a withdrawal from their ISA while 10% of ISA holders had made four or more withdrawals
* Individual Attitudes to Saving: Effect of ISAs on People's Saving Behaviour |
|
Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS)
| |
2009/10 |
2008/09 |
Enterprise Investment Scheme (EIS) up to |
£500,000 |
£500,000 |
| Maximum amount for EIS carry back |
£50,000 |
£50,000 |
Venture Capital Trust (VCT) up to |
£200,000 |
£200,000 |
|
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Stamp Taxes
The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is 0.5 per cent. The liability is subject to rounding up to the nearest £5.
Stamp Duty Land Tax
Transfers of property are subject to stamp duty land tax at the following rates. The £175,000 band for residential property applies to transactions made between 3 September 2008 and 31 December 2009 inclusive. From 1 January 2010 the threshold for residential property will revert to £125,000, except where the property is situated in a disadvantaged area when it will revert to £150,000.
Cost |
Land in
disadvantaged
areas |
Other land in the UK |
| |
Home |
Non residential |
Home |
Non residential |
| Up to £175,000 |
0% |
0% |
0% |
0% |
| £175,001 to £250,000 |
1% |
1% |
1% |
1% |
| £250,001 to £500,000 |
3% |
3% |
3% |
3% |
| Over £500,000 |
4% |
4% |
4% |
4% |
Partnerships
Stamp duty applies to transfers of partnership interests, but the amount payable will not exceed the amount that would have been payable on the value of any shares or securities included in the transfer.
Stamp duty land tax (SDLT) applies to the transfer of an interest in land into or out of a partnership or the transfer of an interest in a partnership (where the partnership property includes an interest in land). The charge is based on the Robertet value of the land and the proportionate interest transferred and it applies only to partnerships whose sole or main activity is investing in or dealing in land. There is no longer an SDLT charge on transfers of partnership interests in other partnerships such as professional partnerships, farming partnerships or partnerships carrying on a trade which is not land-related.
New Leases
Duty is charged according to the net present value of all the rental payments over the term of the lease (NPV), with a single rate of 1% on residential NPV's over £125,000 and on non-residential NPV's over £150,000.
VAT is excluded from treatment as consideration provided the landlord has not opted to charge VAT by the time the lease is granted.
Lease premiums
Duty on premiums is the same as for transfers of land (except that the zero rate does not apply where rent of over £600 annually is also payable).
Zero carbon homes
Qualification for this relief will require zero carbon emissions from all energy use in the home over a year. To achieve this, the fabric of the home will be required to reach a very high energy efficient standard and be able to provide onsite renewable heat and power. The relief is available for the five years to 30 September 2012 and applies to new homes which are liable to SDLT on the first sale. SDLT relief will be available where the purchase price is up to £500,000. Where the price exceeds £500,000 the SDLT liability will be reduced by £15,000. In this circumstance the balance of SDLT will remain due.
Please contact us for further information relating to the qualifying criteria, the fabric of the building, heat and power generation and additional power for appliances.
Transfers that attract stamp duty not exceeding £5 (fixed or ad valorem) will be exempt and not have to be presented for stamping. The principal reason for this is to reduce administration for smaller transactions.
Did you know?
That the Governments expects to receive £8 billion (2008/09 £5 billion) |
|
Air Passenger Duty Rates
| Class of ticket and travel destination |
Duty per UK flight departure
|
Passengers flying to
EEA destinations and certain
other European countries |
In lowest class of travel |
£10 |
| In other classes |
£20 |
Passengers flying to
other destinations |
In lowest class of travel |
£40 |
| In other classes |
£80 |
Change from 1 November 2009
From 1 November 2009 and 1 November 2010 Air Passenger Duty is charged based on a band that is determined by the distance of the capital city of the destination country in miles from the UK.
| Band and distance of capital city of destination country in miles from the UK |
In the lowest class of travel (reduced rate) |
In other than the lowest class of travel (standard rate) |
| |
On and after 1 Nov 2009 |
On and after 1 Nov 2010 |
On and after 1 Nov 2009 |
On and after 1 Nov 2010 |
| Band A (0-2000) |
£11 |
£12 |
£22 |
£24 |
| Band B (2001-4000) |
£45 |
£60 |
£90 |
£120 |
| Band C (4001-6000) |
£50 |
£75 |
£100 |
£150 |
| Band D (over 6000) |
£55 |
£85 |
£110 |
£170 |
Did you know?
That the Governments expects to receive £1.9 billion (2008/09 £1.8 billion) |
|
Landfill Tax
Tax on the disposal of waste on operators of landfill sites calculated according to the weight and to the type of waste deposited.
| |
From 1 April 2010 |
From 1 April 2009 |
| Active waste per tonne |
£48 |
£40 |
| Lower rate - inert waste per tonne |
£2.50 |
£2.50 |
Did you know?
That the Governments expects to receive £1 billion (2008/09 £1 billion) |
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Charitable Giving
Gift Aid
Gift Aid allows charities to reclaim tax paid by UK individual taxpayers on any donations to UK charities. This is effected through a simple declaration and can increase the value of the donation by 25%. Thus for:
| Donation of |
Treated as gross gift of |
Charity receives |
| £1 |
£1.25 |
£1.28 |
| £100 |
£125 |
£128 |
- Individuals are able to claim higher rate relief on cash gifts and payments to charities under gift aid. Basic rate tax is treated as having been deducted, so you must pay enough tax for the year to cover the tax witheld from your Gift Aid payment.
- Special tax reliefs apply to gifts to charities of certain types of shares and securities, or land and buildings. Until 5 April 2011, charities can claim additional tax relief on gift aid donations to compensate for the reduction in basic rate tax.
- Self-assessment now allows individuals to divert some or all of any tax repayment due to them for the year to a charity of their choosing, and to opt for this to be treated as a Gift Aid payment, both via entries on the tax return.
- Individuals also now have the option to make a claim for a charitable donation made in one tax year to be treated as if it had been made in the previous tax year, so long as the claim is made by inclusion on the Tax Return for the later year. So long as the later year's Return is filed in time, this would mean that a payment could rank for higher rate tax relief for the earlier year, even if the donor is liable at basic rate, only, in the tax year in which the payment is made.
Donor benefit limits
The maximum benefit a donor may receive in return for a charitable donation is as follows.
| Amount of Donation |
Value of Benefit |
| £0 - £100 |
25% of the donation |
| £101 - £1,000 |
£25 |
| Over £1,000 |
5% (up to max £500) |
Payments made to acquire goods or services are not gifts at all and do not qualify for Gift Aid. Certain charities can however allow members free entry in return for donated membership fees.
Give As You Earn
- Employees may authorise participating employers to deduct donations from their gross salary for forwarding to their nominated charities.
- Employees receive tax relief in full on their donations
|
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Tax Credits
| Working Tax Credit |
| |
2009/10 |
2008/09 |
| Basic element |
£1,890 |
£1,800 |
| Couple and lone parent element |
£1,860 |
£1,770 |
| 30 hour element |
£775 |
£735 |
| Disabled worker element |
£2,530 |
£2,405 |
| Severe disability element |
£1,075 |
£1,020 |
| Childcare element of Working Tax Credit |
| Maximum eligible cost for one child |
£175 p.w |
£175 p.w |
| Maximum eligible cost for two or more children |
£300 p.w |
£300 p.w |
| Percentage of eligible costs covered |
80% |
80% |
| Child Tax Credit |
| Child tax credit family element |
£545 |
£545 |
| Family element, baby addition |
£545 |
£545 |
| Child element |
£2,235 |
£2,085 |
| Income thresholds and withdrawal rate |
| First income threshold |
£6,420 |
£6,420 |
| First withdrawal rate |
39% |
39% |
| Second income threshold |
£50,000 |
£50,000 |
| Second withdrawal rate |
6.67% |
6.67% |
| First threshold for those entitled to child tax credit only |
£16,040 |
£15,575 |
| Income disregard |
£25,000 |
£25,000 |
|
|
State Pension
| Basic state pension: |
2009/10 |
2008/09 |
| Single person: |
|
|
| Weekly |
£95.25 |
£90.70 |
| Four weekly |
£381.00 |
£362.80 |
| Annual |
£4,953.00 |
£4,716.40 |
| Married Couple: |
|
|
| Weekly |
£152.30 |
£145.05 |
| Four weekly |
£609.20 |
£580.20 |
| Annual |
£7,919.60 |
£7,542.60 |
| Winter fuel allowance (non taxable) |
|
|
| Over 60s household |
£250 |
£250 |
| Over 80s household |
£400 |
£400 |
| Lump sum deferred benefit option |
|
|
| Single person: |
|
|
| One year |
£4,800 |
£5,000 |
| Three years |
£16,100 |
£16,800 |
| Five years |
£29,800 |
£31,000 |
| Married couple: |
|
|
| One year |
£7,700 |
£8,000 |
| Three years |
£25,800 |
£26,800 |
| Five years |
£47,600 |
£49,500 |
|
|
Selected Benefit Rates
| Weekly Benefits |
| |
2009/10 |
2008/09 |
| Basic Retirement Pension |
| Single person (currently £4,953 p.a.) |
£95.25 |
£90.70 |
| Married couple (currently £7,919.60 p.a.) |
£152.30 |
£145.05 |
| Child Benefit |
| First eligible child from 5 January 2009 |
£20.00 |
£18.10 |
| Each subsequent child from 5 January 2009 |
£13.20 |
£12.55 |
| Guardian's allowance |
£14.10 |
£13.45 |
| Statutory Sick Pay (SSP) |
| Average weekly earnings £95 or over (2008/09 £90) |
£79.15 |
£75.40 |
| Statutory Maternity Pay (SMP) |
| 90% of average weekly pay |
First 6 weeks |
Maximum £123.06 (2008/09 £117.18). Minimum
90% average weekly pay |
Next 33 weeks |
| Adoption Pay (SAP) |
39 weeks |
| Paternity Pay (SPP) |
1 week or fortnight |
| Both SAP and SPP |
| 90% of average weekly pay |
Max £123.06
Min £117.18 |
Max £112.75
Min £78.30 |
| Jobseekers allowance |
| Single person |
£64.30 |
£60.50 |
| Married couple |
£100.95 |
£94.95 |
| Bereavement Benefit |
| Lump sum |
£2,000 |
£2,000 |
| Bereavement allowance (standard) |
£95.25 |
£90.70 |
| Widowed parent's allowance |
£95.25 |
£90.70 |
|
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Disclaimer
The information in this tax card is based upon the 2009 Budget and other earlier announcements and may be subject to amendment by the Finance Act.
For information of users: This material is published
for the information of clients. It provides only an overview of the regulations
in force at the date of publication, and no action should be taken without
consulting the detailed legislation or seeking professional advice. Therefore
no responsibility for loss occasioned by any person acting or refraining
from action as a result of the material can be accepted by the authors
or the firm. |
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